Discuss the roles that uncertainty and risk play in managerial decision making.
What will be an ideal response?
Answer: Student answers will vary, but should demonstrate accurate knowledge about the risks managers face. Uncertainty means the manager has insufficient information to know the consequences of different actions. For example, uncertainty about the strength and timing of the economic recovery made businesses slow to start hiring. But economies do not strengthen until consumer demand picks up, which does not happen until employment rises. When you can estimate the likelihood of various consequences but still do not know with certainty what will happen, you are facing risk. Risk exists when the probability of an action being successful is less than 100 percent and losses may occur. If the decision is the wrong one, you may lose money, time, reputation, or other important assets.
You might also like to view...
Josh introduces his message by opening the communication channel and previewing the message, much as this book’s preface does. Josh is employing which of these?
A. fast-forward B. message-alerting C. low-monitored feedback D. feedforward
Weller Co issued $600,000 of 30-year, 8 percent bonds at 106 on one of its semiannual interest dates. The straight-line method of amortization is to be used. What is the total interest cost of the bonds?
A) $1,439,000 B) $1,404,000 C) $1,440,000 D) $1,476,000
For each question in a series of incomplete or elliptical questions, you should _____________
a. use one question mark for the series b. use separate question marks for each c. use the rules for using commas in a list d. revise each as a complete question
Trend variation in a time series would most likely be characterized as?
a. Rapidly decreasing demand b. Gradually increasing demand c. Gradually increasing or decreasing demand d. Demand pattern influenced by seasonal factors